What is the difference?
Accountant and bookkeeper are job titles that are sometimes used interchangeably with each other, but they convey different job responsibilities and level of technical knowledge. Bookkeepers are the people that do most of the data entry for businesses. Accountants are the people that do most of the oversight and help ensure that the bookkeepers are entering in all of the data correctly. Both positions can be crucial to maintaining healthy finances for the business, but understanding the difference in responsibilities can help you make clear boundary lines and separation of duties to have a more efficient accounting system.
A bookkeeper is exactly what the name implies, they are someone that helps maintain the books of a business. A bookkeeper will be doing most of the data entry and entries for the company to ensure that all transactions are accounted for. Their job duties include, but are not limited to the following.
- Maintain general ledger to ensure all transactions are recorded and placed in the proper period
- Bank reconciliations to match bank balances per the bank and bank balances per the books.
- Record financial transaction in accounting software
- Prepare bank deposits
- Prepare invoice for customers or clients
- Prepare purchase orders for vendors
- Input employee time cards for payroll
An accountant’s duties are more complex than that of a bookkeeper because their duties involve some level of analysis or compilation. The accountants at a business will be the one looking at the information that bookkeepers are inputting as a basis for financial decisions. Accountants are also the primary person responsible for making sure that all tax and legal filings are taken care of. A business can either utilize an in house accountant or use an external accountant to take care of these requirements. The job duties for an accountant include, but are not limited to the following:
- Analyze past financial data to help with projections
- Review bookkeeper’s work for accurate input and classification
- Assist with payroll tax filings
- Assist with sales tax filings
- Prepare financial statements
- Help business owner make financial decisions
- Make sure that business is following all legal requirements and laws
In today’s business world, these two functions (bookkeeping and accounting) are starting to become more blended with each other. There are vast amounts of accounting software (Quickbooks, Wave, Freshbooks, etc.) that are tying the bookkeeping aspect into the accounting function with ease. These software will take the transactions that have been recorded (bookkeeping responsibility) and will create the statements and reports that the accountant would normally create. Due to the technology that is available and the size of your company, there might not be a need to hire an in-house bookkeeper and in-house accountant, but instead to just hire one individual that can assist you with both the bookkeeping and accounting functions of your business. There are also many options in hiring an outside accountant or firm that can provide all of the bookkeeping and accounting work for you. Hiring an external accountant may be better for smaller companies that may not have the capital or need to have an employee that does all of the accounting work.
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